Laker Company reported the following January purchases and sales data for its only product. The Company uses a periodic inventory system. For specific identification, ending inventory consists of 330 units, where 300 are from the January 30 purchase, 5 are from the January 20 purchase, and 25 are from beginning inventory.

Date		Activities	Units Acquired at Cost								Units sold at Retail
Jan.	1	Beginning inventory	200	units	@	$	12.50	=	$	2,500
Jan.	10	Sales										160	units	@	$	21.50
Jan.	20	Purchase	130	units	@	$	11.50	=		1,495
Jan.	25	Sales										140	units	@	$	21.50
Jan.	30	Purchase	300	units	@	$	11.00	=		3,300
		Totals	630	units					$	7,295		300	units

rev: 10_06_2020_QC_CS-232448

Required: 1. Complete comparative income statements for the month of January for Laker Company for the four inventory methods. Assume expenses are $1,850, and that the applicable income tax rate is 40%. (Round your average cost per unit to 2 decimal places.)

2. Which method yields the highest net income?

multiple choice 1

• LIFO

• Specific identification

• FIFO

• Weighted average

3. Does net income using weighted average fall between that using FIFO and LIFO?

multiple choice 2

• Yes

• No

4. If costs were rising instead of falling, which method would yield the highest net income?

multiple choice 3

• Weighted average

• Specific identification

• FIFO

• LIFO